Gardiner taxpayers to pay slightly lower municipal tax rate

GARDINER — Throughout the budget season, it was clear that at least some Gardiner property taxpayers would see a decrease in the municipal portion of their property tax bills, because of a change in the state’s homestead exemption program or because of cuts in city spending, or both.

In the budget officials approved June 22, the city’s share of the tax rate was down 2.1 percent from the previous year’s. Now that the annual calculation of the city’s taxable valuation is complete, it appears that every payer of property tax in Gardiner will pay even less.

Increased investment in business equipment at the Gardiner Hannaford, shown here in this September 2015 file photo, was a contributing factor to a lower tax rate in the city. Staff file photo by Joe Phelan

“We were expecting (the valuation) to stay flat,” City Manager Scott Morelli said Monday. “We had a fire loss in downtown Gardiner and we had some growth, and we figured that would offset the loss.”

In July 2015, a fire significantly damaged several buildings in downtown Gardiner, and by the end of the year, 235 Water St. was demolished. Two other fire-damaged Water Street buildings remain standing, but they remain vacant and locked up.

Four parcels owned by T.W. Dick Co. moved off the tax rolls and into city hands during the year as a part of a multi-step cleanup and redevelopment plan, Morelli said.

A couple of weeks ago, he said, the city’s contracted assessor, Curt Lebel, said city officials would see a “decent” increase in value, enough that it might reduce the city’s mill rate.

“We kept our fingers crossed, because it seemed too good to be true,” Morelli said.

But from April 1, 2015 to April 1, 2016, by Lebel’s count, seven or eight new homes were built in city limits, and a number of small improvements were made to existing homes. At the same time, the Gardiner Federal Credit Union built a new building, the value of Central Maine Power’s real estate in the city increased and both Hannaford and Scientific Games increased investment in business equipment.

Morelli said the change resulted in a 30-cent decrease in the tax rate. In addition, the city’s share of the overall budget shrinks the tax rate by 25 cents more due to both $86,000 in cuts from the city’s operating budget through savings in staff reductions and because of increases in non-property tax revenue. That takes the tax rate from $21.60 to $21.05 per $1,000 in assessed valuation on the city’s portion of the bill. Adding in Gardiner’s portion of School Administrative District 11’s budget of 44 cents, and the Kennebec County government’s assessment of 1 cent, the overall rate is $21.50 per $1,000 of assessed valuation.

As a result, median homeowners will pay $15 less than anticipated in their tax bills, while the median commercial property owner will pay $24 less than anticipated.

“I think this shows we’re going in the right direction,” Morelli said. “Investing in economic development is starting to pay off, and we’re able to spread the tax burden. It’s nice to be able to pass it on to the taxpayers.”

A letter to taxpayers detailing these changes and other city news is expected to be sent out later this week.

Morelli also noted in the letter that if the city had received its full share of municipal revenue sharing, the tax cut would have been a much larger 7.4 percent. The average homeowner would have seen a cut of $235. As it stands, Morelli said, Gardiner is expected to lose $536,000 this year alone. State elected officials have failed to fund municipal revenue sharing at the level spelled out in state law for several years. Gov. Paul LePage has said he wants to eliminate state revenue sharing by July 1, 2017.

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